The Fed: Tight or Light?: Mark Twain once remarked that: “It ain’t what you don’t know that gets you into trouble. it’s what you know for sure that just ain’t so.” In the crazy world of post-Covid economics, there may be more than a little truth to that remark. 

Economist Brian Wesbury reflects on the supposed tight monetary policy by the Fed in recent years to combat the inflation caused by the massive amounts of money injected into the economy during the pandemic by both Trump and Biden administrations and their accomplices in Congress. Dr. Wesbury suggests “maybe one of the reasons we haven’t yet experienced economic turbulence is that monetary policy hasn’t been as tight as most investors thought.” If that’s true, then given the strength of the economy and employment, what does that portend for future Fed actions, interest rates and the arrival of the long-anticipated recession? Find in his recent blog post  “Is this Fed Tight, or Not?” 

Inflation  (It’s Our Fault):  New inflation data was released this past year.  The broad-based CPI came in at 3.5 % and the core rate was flat.  ITR Economics Brian Beaulieu unpacks the data, looks at commodities vs labor, and finds that the inflation due the former is down, but the amount due to labor is surging.  In short inflation is being driven by what we’re being paid ( so inflation is our fault?).  Learn more at ITR’s latest Fedwatch.